Coscto shares moved higher on Wednesday after the company announced that it would be offering a special dividend. It also increased the price of its quarterly cash dividend by a nickel.
The wholesale retailer made the announcement on Tuesday that its board of directors had declared a special cash dividend of 7 per share. This special dividend, as well as its quarterly dividend of 50 cents, will be payable to shareholders of record on May 10th on May 26th.
Costco said that funding it would be through borrowing and that the payment would come out to about $3.1 billion.
CFO Richard Galanti stated, “Our strong balance sheet and favorable access to the credit markets allow us to provide shareholders with this dividend, while preserving financial and operational flexibility to continue to grow our business globally.”
On Wednesday shares of Costco soared over 2%.
The company also announced that it would be increasing its membership fees for both individuals and businesses in the U.S. and Canada. The price increase moves the fees to $60 per year. Executive fees will increase by $10 to $120 per year.
Last year the wholesale retailer made $2.6 billion in membership fees.
Disclaimer: We have no position in Costco Wholesale Corporation (NASDAQ: COST) and have not been compensated for this article.